Since 2008, an independent look at challenges and opportunities in sports and financial investing, with occasional diversions as my mood takes me. Nothing is for sale, and this not a Profit and Loss report either. They're boring.

Monday, 20 January 2014

A few more thoughts from Ballabriggs on the topic of the week, and I'm not talking about ten-fold accumulators. These were originally posted on the Betfair forum, but since he didn't object to me stealing his previous entries, I'm hoping he will forgive me again.

One more glaring clanger in Sporting Data's statement is this

"Bets will be placed when the odds generated by the model are significantly out of line with the market." .What they actually mean is

"Bets will be placed after every point, but will only be matched when the odds generated by the model are significantly out line with the market."

The courtsider will press a button saying Player A or Player B has just won the point. If they click Player A, bets are instantly put in with a lay of say 1.69 and a back of 1.74. [If they click Player B, bets are instantly put in with a lay of say 1.79 and a back of 1.84]. Bets will be put into the market every point, and matched if they are out of line with the spread of 1.69-1.74, or 1.79 to 1.84.When SD say "There are plenty of times that they will send info back and nothing will be done with it., that means that on those particular points, they didn't manage to hoover any out of date money, and will come back to try again after the next point is won or lost.When SD say "the odds and stake of the bets are all determined by the individuals in London and not by the employees on court"., if you were paying SD for this expensive information, you would set your model to instantly put in bets of 1.69-1.74 or 1.79-1.84, should the courtsider press button A or button B. There really is no point paying top dollar for SD information, if you're going to manually see a point has been won or lost, then decide a stake size, then type in your bets and increments, then faff a bit more etc etc. There is no conceivable way these SD related trades are not automated, the courtsider presses a button, and this triggers the computer in London to automatically put in 1.69 lay/1.74 backs, or 1.79 lay/1.84 backs, all done in nanoseconds.

I do not see any realistic end difference between taking a computer courtside and placing the bet, to having the SD tactic of having a courtsider press button A or button B, and in nanoseconds a signal is instantly sent to London, where trades are automatically smashed into the exchange markets. Yes the London SD customer (or SD themselves) have programmed the bot to calculate stakes/exposures instantly, yes the bot calculates the correct back/lay prices instantly, and yes the signal from the courtsider results directly in bets going into the markets, which may or may not be matched within 5.000001 seconds of button A or button B being pressed, taking advantage of any recreational gamblers who are unlucky enough to have either lost concentration, or just not known about the hoovering.Betfair have a serious problem now, which isn't going to go away. Sporting Data have been operating since 2011, and to be fair, Betfair must have known both from social contacts between current staff and the three (ex-?) staff members who set it up, and from key account holders, what Sporting Data, and other organisations are doing. There is no way that this 22 year old chap in 2014 is the first person they have ever sent into an event, and it is extremely likely they have been doing this both at previous Australian Opens, and at other world tournaments, where for some of them there are supposed to be draconian legal restrictions on betting in-running.The Australian regulator is much more aggressive and sharp-fanged than the British one. If they work out that Betfair have known there are former employees running companies and sending people to the Australian Open, pressing buttons which result in trades going into the market live after 5.000001 seconds of 22 year olds pressing Button A or Button B, there is no reasonable difference between doing that and actually betting courtside to get bets in live after 5.000000 seconds. This loophole is very, very ugly, and since Betfair could have done something about it in the 3 years in which Sporting Data have been running, and haven't done anything about, one day Betfair's luck will run out. It may or may not be technically illegal, but it is against the spirit of the laws banning in-running betting like this from the Australian Open, and it really wouldn't be a shock for betting licenses on events from Australia to be thoroughly reviewed across all sport. Betfair could have stopped all this, but I just hope the blind eye doesn't come back to haunt the 99% of punters who want to bet fairly, and Betfair themselves.

It dos seem somewhat implausible that the data is received in London, and then passed on to their clients, who would surely then all be competing against each other for the same money. How does one get to be a client anyway? The Sultan may know more about how they operate, but in his case he appears to have been a temporary employee working on a commission basis. He does state though that Sporting Data are an example of an "ordinary betting syndicate", which are "legitimate businesses that make their money from sports trading - just like the one I traded for a little over a year ago". Yet Sporting Data themselves say that they make their money from selling their data to clients - see 1) below:

We wish to make the following points and clarifications.:

1)Sporting Data is a company providing sporting data and services to certain individuals. Our clients use the information provided to place bets.

So the clients (plural) use the information to place bets.

2) We have employees on the courtside sending back information to London and that is then used to place bets on the outcome of the match. However, the odds and stake of the bets are all determined by the individuals in London and not by the employees on court. There are plenty of times that they will send info back and nothing will be done with it. In no way could they considered to be betting themselves.

No mention in this line item about who actually places the bets, other than "individuals in London", which is odd. Why would all their clients be based in London? And why would Sporting Data make a decision on whether or not to pass information on to their clients? Not all points in tennis are equal of course, but the decision on whether or not to make use of it should be that of the client.

3) We use mathematical models to assess the probability of a match outcome. Bets will be placed when the odds generated by the model are significantly out of line with the market. A lot of syndicates use a similar methodology. Clearly, we need the most up to date information to generate accurate match probabilities. We cannot rely on TV pictures as they are out of date.

Again the 'bets will be placed' statement is rather vague, but it is easy to infer now that it is now a syndicate placing the bets rather than "individuals", and the "we" implies that Sporting Data are doing more with the data then selling it.

4) Most of the bets placed are placed on betting exchanges - platforms devised specifically for punters to pit their information and simulation techniques against each other. It is the tightest and most competitive environment there is and we have invested a lot of time and effort to become competitive.

How would Sporting Data know how the data they sell to their clients is used, and where? If Sporting Data's business is "providing sporting data and services to certain individuals" their time and effort would be in the area of data transmission, and the environment the data is used in would be an irrelevance.

5) We have no interest in corrupting the outcome of a match. We want both players in any given match to perform as well as they possibly can. Our models fail to work if the result is any way compromised and we would take all steps to avoid betting on any match we suspect to be corrupted.

Again, why would a data provider have a model? The odds and stake of the bets in 2) are being determined by the individuals in London.

For a statement that is meant to be a clarification, it really is quite confusing. It's more of an obfuscation than a clarification.

Either Sporting Data's business is selling data, or they are a betting syndicate making their money from placing bets themselves. Since the data only has value for a few seconds, they can't be doing both. Sloppy seconds doesn't work too well in the betting markets.

If they are placing bets themselves, then as Ballabriggs says, there are likely to be some awkward questions asked of Betfair and their integrity team turning a blind eye to something that has been happening for three years at least.

Anonymous commented on my previous post that:

I'm not sure I agree with all points made here. In-play will inherently always be imbalanced from a time perspective, it's the nature of the beast. Radio beats TV, analog signals beat digital. The in-play delay should protect you in as far as you being able to cancel your bets? This is your protection. I don't get my fingers burnt any more in in-play markets, it was an easy choice. So don't bet/trade in them if you can't compete? Simple.

Agreed, but the in-play delay is not sufficient to protect customers, and the Gambling Commission state that:

This is done in order to ensure that the odds on offer reflect the progress of the event and that bets made are a true reflection of what is happening with an up-to-date market.

And agreed that if you can't compete, you should stay away. The problem is that not everyone is equally aware of the risks - as the Gambling Commission report stated:

Although betting with varying levels of knowledge and skill is not unfair in itself, there may be a problem where betting customers perceive their chances to be better than they actually are due to a lack of knowledge of the in-running betting in terms of the subject-matter itself or the actual market and how it operates.

If the same account is always first to act, and this move is beating the countdown clock, then there is a problem. Betfair may not have a legal duty to protect their clients, but they have a moral duty to do so, or they run the risk of being accused of treating some accounts favourably, something that is even more bad-tasting if it belongs to previous employees or their business associates.It would also be in their own long-term interest to ensure as fair a playing-field as possible. Betfair's business model would surely be better served by limiting any unfairness to "knowledge and skill" and keeping players in the game, than by allowing privileged accounts to slowly suck the life out of them.Yes, court-side is fastest, then radio, TV etc., but clearly the difference between first and most is often too large, and the Gambling Commission might reasonably expect Betfair, or any exchange for that matter, to close such a loophole. None of us want to see in-play trading banned, an action that would simply drive it underground or to more dubious jurisdictions. One of Betfair's advantages is that it is a legitimate UK company, trading on the London stock market, and well regulated, but an exchange surely has a duty to its customers to ensure that the infrastructure is as fair as possible. If someone is constantly taking an advantage of a loophole, the loophole should have been closed long before three years, whether the beneficiary is previous employees, their associates or an entrepreneurial individual and the Gambling Commission and whoever the Australian regulator is will know this.

4 comments:

Betfair have not just censored the ballabriggs account from the forum, they have closed it too.

It's ok to leave the company knowing how the markets operate inside out, who wins, and how they win. It's ok to set up an external company, betting on Betfair markets, using courtsiders sent not just to places where it is legal to bet in-running, but also to places like the Australian Open and the US Open.

It's ok to send young 22 year olds putting them at the risk of prosecution to these places.

BUT. It's not ok to talk about it.

Betfair have to realise the enemy isn't the messager, it's the people straining at the very edges of legality, offering very poor out of date value to Betfair customers, which in turn does wound Betfair profits.

There is now a 2nd investigation in the news today, this time into a cricket courtsider.

In 2009 Betfair were active in driving people away who criticised the company on the forum. It was at the time they advised the PC and were about to float . I am aware for example of one chap who had losing bets replicated so if he lost 5k on a bet they would key the bet again so he lost 10k . I had Betfair employees and associates hounding me on the forum and abusing me on the phone .

About Me

I have had a life-long interest in sports and after studying Pure Mathematics with Statistics at secondary school, have been fascinated by odds and probability.
The first system I came up with was a simple one - back the favourite and double up after a loss until a winner. Simple enough in theory, and I told my Dad about it. Not being a betting man himself, he ran it by some of his colleagues, and came home to tell me that it wouldn’t work because a long losing run would mean that the bank would be empty. Then there was always the possibility that the winner would be returned at odds-on, meaning that the total returns would not match the outlay. Not what a ten year old wants to hear! Only slightly daunted, I then went on a search for the Holy Grail, the secret to riches that I knew was out there somewhere. Finally in 2004 I stumbled across an article about Betting Exchanges and four years on I am able to make a steady profit. I am at that age where I can start thinking about retirement and anything I make from trading sports will bring that day forward.